Abstract

http://ssrn.com/abstract=1685618
 
 

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The Role of Government in the Labor-Creditor Relationship: Evidence from the Chrysler Bankruptcy


Bradley S. Blaylock


Oklahoma State University - Spears School of Business

Alexander Edwards


University of Toronto - Rotman School of Management

Jared R. Stanfield


University of New South Wales (UNSW) - School of Banking and Finance; Financial Research Network (FIRN)

August 13, 2013

Journal of Financial and Quantitative Analysis (JFQA), Forthcoming

Abstract:     
We examine the role of government in the labor-creditor relationship using the case of the Chrysler bankruptcy. As a result of the government intervention, firms in more unionized industries experienced lower event-window abnormal bond returns, higher abnormal bond yields, and lower cumulative abnormal bond returns. The results are stronger for firms closer to distress. We also observe the effect in firms in which labor bargaining power is stronger and those with larger pension liabilities. Overall, the results underline the importance of government as a significant force in shaping the agency conflict between creditors and workers.

Number of Pages in PDF File: 47

Keywords: Organized Labor, Bankruptcy, Government Intervention, Cost of Debt

JEL Classification: G32, G33, G38

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Date posted: August 22, 2011 ; Last revised: August 15, 2013

Suggested Citation

Blaylock, Bradley S. and Edwards, Alexander and Stanfield, Jared R., The Role of Government in the Labor-Creditor Relationship: Evidence from the Chrysler Bankruptcy (August 13, 2013). Journal of Financial and Quantitative Analysis (JFQA), Forthcoming. Available at SSRN: http://ssrn.com/abstract=1685618 or http://dx.doi.org/10.2139/ssrn.1685618

Contact Information

Bradley S. Blaylock
Oklahoma State University - Spears School of Business ( email )
430 Business Building
Stillwater, OK 74078-0555
United States
Alexander S. Edwards
University of Toronto - Rotman School of Management ( email )
105 St. George Street
Toronto, Ontario M5S 3E6
Canada
Jared R. Stanfield (Contact Author)
University of New South Wales (UNSW) - School of Banking and Finance ( email )
Sydney, NSW 2052
Australia
+ 61 (02) 9385 4291 (Phone)
Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.firn.org.au

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